Homebuilder Hovnanian Swings To Profit

Red Bank, NJ, March 3, 2010--Homebuilder Hovnanian Enterprises said Tuesday that it recorded a quarterly profit for the first time since 2006 thanks to a large tax gain.

The company earned $236.2 million, or $2.97 a share, in its fiscal first quarter. That compares with a loss of $178.4 million, or $2.29 a share, in the prior-year period.

Excluding a $291.3 million tax gain, Hovnanian lost about $55.1 million, or 69 cents a share.

Revenue dropped to $319.6 million from $373.8 million the year before.

The tax benefit helped offset the fact that completed home sales for first quarter ended January fell 10 percent from the same period last year.

"We are pleased to see the market for new land deals begin to thaw out a bit and we continue to diligently pursue new land opportunities ... " said Ara Hovnanian, chairman, president and chief executive of the Red Bank, N.J.-based company.

The latest results bring to an end a string of 13 quarterly losses for Hovnanian. Several builders have managed to turn a profit in recent months because of a tax rule enacted last year that extends the time companies have to offset past losses.

Like other builders, Hovnanian saw orders improve last year as low interest rates and a housing tax credit coaxed reluctant buyers into the market.